Overseas losses add to DSME’s woes

Another huge hole in the accounting books of South Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME) is likely to be revealed soon.

Local media reported yesterday that DSME will post losses from its overseas units of up to KRW1trn ($861m). DSME reported a record second quarter operating loss of KRW 3.07trn ($2.65bn) with alleged accounting fraud hitting the yard hard. Since then lead creditor Korea Development Bank (KDB) has been going though DSME’s books.

Accounts at DSME’s overseas units in Romania, China and North America have all been scrutinised in the past couple of months.

Creditor banks will announce a restructuring plan later this month to revive DSME. Among likely measures will be the likely liquidation of DSME’s overseas subsidiaries including Daewoo Mangalia Heavy Industries, Romania’s largest shipyard.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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